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The bis reported the total amount of outstanding derivatives has reached a practically incomprehensible $1.28 quadrillion. Yes, you read that correctly—quadrillion! And as astounding as this astronomically huge number is, the actual totals are even bigger because this number does not include derivatives related to the commodity markets (which the bis says it can’t track because values aren’t available).

The market is increasingly dominated by industries of “investors” and hedge funds that only exist to make money through derivative speculation. And a big part of that speculating is done with borrowed money.

But when you play with borrowed money, the risk of getting burned beyond recovery increases rapidly.

According to DeMeritt, the majority of the $1.28 quadrillion in derivatives is “owned” on somewhere near 95 percent margin!

That has got to be “one of the scariest phenomena in economic history,” he says.
In case you are wondering, 95 percent margin means that for every dollar speculators have spent betting on derivatives, approximately 95 cents of that money was borrowed. For $5,000, a hedge fund speculator can control $100,000 worth of credit derivatives.

Out of the top 10 commercial banks with derivatives (as of last September), nine are American. Of the top 25, all but five are U.S. corporations.

Och störst här är JP Morgan som sitter med drykt 50% av alla derivat.

JP Morgan Chase bank has $1.244 trillion in assets. Yet, it has a mind-boggling $91.73 trillion in derivatives contracts on its books. A person could buy the whole bank for a comparatively paltry $129 billion. That means that if JP Morgan was exposed to just 1.3 percent of its outstanding derivative contracts, and things went wrong, it would be completely insolvent.

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The Great American SpectacleUnfortunately, the exhibitions and circuses are only beginning, because that’s what empires become when they are going down and politicians don’t want people to know ithttp://www.thetrumpet.com/index.php?q=6051.7.0.0

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